The din of gunfire is deafening as Ryan Peake, 20, and two of his high school friends blast away at a cadre of terrorists. It's 6:30 p.m. in the PC café, part of a nondescript strip mall in the Orange County, Calif. suburb of Garden Grove, and there are about twenty customers inside playing the online game Counterstrike against kids in the other twenty cybercafes within a four-mile radius. In the game, users play either terrorists or counterterrorists locked in a violent faceoff. Although Peake dislikes the kids on the terrorist side who give themselves handles like Osama's Mama ("That's not very respectful," he says, blowing them away), he loves the buzz he gets from the game. "When you're driving home, you're like ?woo-hoo!' and you tend to drive a lot faster," he says. "You think you're invincible."

Adrenaline bursts aside, it's hard to feel invincible inside the PC café these days. Phuong Huu Ly, 20, a junior at Santa Ana college, wanted to play Counterstrike here one night at the end of December but all the computers were taken, so he stepped out for a smoke. Once outside, according to police, he encountered four gang members, one of who allegedly stabbed him in the head with a screwdriver. He died in a nearby hospital eight hours later. Police have said that Ly was a "gang associate" and that the slaying may have been the result of a rivalry; Ly's family has described him as "a good kid" who wasn't part of a gang. The incident was only the latest in a string of gang-related assaults in a town that has become notorious for a new breed of criminal: the cybercafe hoodlum. "A lot of the good kids won't come here any more," says PC Café manager Eric Cho. "It's definitely hurt our business."

Garden Grove is one of the most ethnically diverse cities in the U.S.  a third of the population is Hispanic, a third is Asian, and the other third is everything else. Many of the city's cybercafes are owned and operated by Korean immigrants and, like their popular counterparts in Korea, the establishments tend to be a magnet for Asian gangs. The gangs are very fluid entities: unlike Crips or Bloods, they don't wear colors, and members don't readily admit to their existence. They were originally formed for self-defense, but have gradually become more offensive, with gangs from different backgrounds (Korean, Vietnamese, etc.) squaring off against each other. "They're not really territorial," says Police sergeant Mike Handfield, who heads up the Ly investigation (one suspect has been caught, three others are at large). "It's a virtual reality set-up. When you have groups that are already rivals and they get together because of these games, that has built-in problems."

Not that city fathers blame the violence of the games themselves. "We had gangs long before we had cybercafes," says three-term mayor Bruce Broadwater, 60. But Garden Grove officials do admit to being blindsided by the speed at which the establishments spread  this time last year, there were only three of them. "We should have treated them like arcades," says city manager George Tindall  meaning stricter licenses and a waiting period. "The word 'Internet' confused us. It brought up all these First Amendment issues."

Future cybercafes in the community will, in fact, be treated like arcades (not that there's likely to be many of them  the market is already saturated and two have closed in recent months). As for the ones already standing, the city will soon require security cameras and guards, one employee for every ten computers, a closing time of midnight and an 8 p.m. weekday curfew on minors.

The new restrictions have cybercafe owners steamed. Competition between the venues has already forced them to charge the rock-bottom price of $2 per person per hour. Every hour they close is money lost to the 24-hour cybercafes up in Los Angeles and Irvine, and security is expensive. On a typical night, 40% of their customers at 8 p.m. are underage. And besides, owners argue, most of the cafes have unblemished records. "Nobody's gambling here," says Steve Choi, 36, dapper-looking owner of the Net2Net café. "There's no pornography. They're not drunk. They play games, they learn how to use the computer and then they go home. It's better than hanging around."

Trouble is, in a sleepy town like this where it's hard to find an open restaurant after 10 p.m., cybercafes with their 4 a.m. closing times rapidly became magnets for the young and the restless: 21st century pool halls. Police gang enforcement units say they spent roughly 60% of their time in cybercafes in any given week. And some owners haven't shown much appetite for obeying the new regulations. Though the PC Café insists it enforces the 8 p.m./18-year-old rules already, at least two of its underage Counterstrike customers last week said they'd never even heard of the curfew, let alone been carded.

The gangs may have been driven away for the moment  no major incidents have been reported since Ly's death. But the environment that nurtured them still exists, both here and across the Internet café-filled malls of southern California.